He Preaches Free Markets, Not Mao

By NICHOLAS D. KRISTOF

Published: May 11, 1992

DONGGUAN, China—
For anyone who thinks of Communist Party bosses in China as old ideologues in Mao suits, Liu Shuji comes as a surprise.

A 43-year-old dynamo who favors well-cut business attire, Mr. Liu uses his tiny Motorola cellular telephone not to mount "political study" campaigns but to recruit foreign investors. One of his favorite economists is Milton Friedman, the American proponent of free markets, and Mr. Liu's aim is to spread wealth rather than revolution.

Mr. Liu, the Communist Party secretary for the urban area of Dongguan, one of the richest cities in southern China, is an example of the new breed of Communist officials emerging in towns throughout the nation. Reared in the fervor of the Maoist era, and turned off by it, they today prefer practical policies to promote economic growth through contact with the West. Lens on Local Government

"The Communist Party and the Republican Party and the Democratic Party are the same in some ways," Mr. Liu said in his elegant second-floor office overlooking the main street of Dongguan. "You can't pressure people to stay in power. You've got to give people a better life and improve the economy. If the economy doesn't improve, then the Communist Party is in trouble."

The party is often a very different creature at the local level than at the center, and nowhere is this more true than here in Guangdong Province, adjacent to Hong Kong. Mr. Liu's pragmatism seems fairly typical of his generation, and in many ways he offers a window into the minds that run the nation's local governments.

Mr. Liu, a soft-spoken man with a boyish face and a mischievous grin, was born to a peasant family in Guangdong. As a university student during the Cultural Revolution, the tumult that lasted from 1966 to 1976, Mr. Liu was one of the millions of Red Guards who made revolution on a daily basis. He became a leader of a Red Guard faction in the provincial capital, Canton, and battled rival groups.

That experience apparently sapped his revolutionary ardor, for Mr. Liu was already a committed pragmatist in the early 1980's when he worked as a local official in the farm town of Humen. The challenge in those days was to apply a national policy that as an experiment allowed the breakup of agricultural communes in backward areas.

"We saw that the experiment worked very well," Mr. Liu recalled. The new individual farming plots were far more productive than the communes. So, without waiting for Beijing's approval, Mr. Liu and other local leaders extended the experiment across the board and allowed the peasants in almost all areas to divide up the communes.

The central Government eventually affirmed that this was the right thing to do.

Mr. Liu's flexibility is evident in the remarkable changes in his appearance that have taken place over the years.

In an interview four years ago, when he was deputy mayor of Dongguan, Mr. Liu wore a simple tunic and looked like an ordinary Chinese worker. These days, reflecting the increasing wealth and sophistication of Dongguan, Mr. Liu wears stylish wool suits and is driven around in a red Mercedes-Benz 200 that is scented with Kiss car cologne. His cellular telephone is never more than a few feet away.

The job of Communist Party Secretary includes responsibility for all Government and party activities, but Mr. Liu devotes most of his time to economic development. While the national leadership fulminates about "hostile foreign forces," Mr. Liu strives to increase business with those forces -- particularly with Hong Kong.

Many of Dongguan's 1.3 million people have relatives in nearby Hong Kong, and the backbone of the local economy is the network of Hong Kong-financed factories that make toys, shoes and clothing for export. Some of the factories are partly owned by the city government and generate profits that the city authorities have used to buy Canadian real estate and to set up several dozen companies in Hong Kong.

When he is asked if all this contact with Hong Kong is subversive of Communist rule, Mr. Liu seems horrified at the question.

"We shouldn't be afraid of such contact," he said. "There are many things about other countries that we must study." Favors Slow Liberalization

In particular, Mr. Liu believes that China must study Western management practices and market economics. He said that while socialist countries have done well in reducing gaps between the rich and poor, they generally have poor service and low efficiency.

Like many moderate officials, Mr. Liu favors political liberalization, but very slowly, to avoid instability that might threaten economic growth.

"Reform has focused on the economy, and political change has lagged a bit," he said. "Chinese go along with that. We remember the Cultural Revolution, and we don't want that chaos again. People want to see prosperity and democracy both, but in a stable way. Westerners maybe don't understand that very well."

In other parts of China, political study classes are held every week or so in most factories and offices and include readings of speeches by national leaders. There is not much of that in Dongguan.

Pressed for an example of whether city workers still go through some political study, Mr. Liu paused.

"There've been some special study sessions," he said. "Hygiene and manners, for example. Now the staff know that they have to wear nice clothes and can't wear sandals to the office."